Small House Blues: Defending the Indigenous Villagers

It’s sexist. It’s unsustainable. It has been blatantly abused for decades. And, don’t let anyone fool you; it works just the way it’s supposed to work. Yes, it’s that 1972-vintage Small House Policy (SHP) that [almost] everyone loves to hate. (Originally published on http://fragrantdelta.com/)

In land-scarce Hong Kong, it is not hard to imagine the many problems of an arrangement that allows only male descendants of pre-1898 New Territories villagers to construct one small house each on private land, or on government land at a concessionary premium. The litany of complaints is so long and well cited, that little more needs to be said about them.

Certainly, the Hong Kong government requires no reminders that the policy has drawbacks. Officials have admitted its blatant abuse for years. They have also long known about the SHP’s unsustainability as well as its many conflicts with other policy priorities.

In fact, the only reason this topic is newsworthy today is that a District Court judge recently found 11 “indigenous villagers” guilty of defrauding the government by transferring their land rights to a developer, thereby causing the “earth to move” for some pleasantly surprised commentators. By this point, any claim that the SHP is working may strike readers as bizarre.

But it does work! It “works” because its real purpose is to provide a framework for compensation in exchange for village support. Its present form reflects years of political negotiations between the colonial government and the Heung Yee Kuk (the Kuk), an advisory and statutory body that has always prioritised indigenous villagers’ economic interests.

For better or worse, the SHP has met its aim. It will change only when officials believe that its political utility no longer justifies its costs.

Painstakingly Negotiated

The first thing to recall about the SHP is that it is much older than many give it credit for.* Primordial versions of the policy have existed since 1905, when New Territories villagers were allowed to build small houses on their own land free of premium. It seems that British diplomats promised the Qing government that local customs would be protected, with construction of small houses construed as part of those customs.

Land was important from the start. In fact, the Kuk’s predecessor organisation arose out of a protest over a colonial plan to amend its nil-premium promise. As for the Kuk itself, the first founders were either well-to-do – founding president Li Chung-chong was a salt merchant – or connected to wealthy New Territories families.

Therefore, from the start, the Kuk has mainly existed to promote economic interests, a fact of which the colonial government was painfully aware. Until the 1968 establishment of District Offices, almost all government contact with indigenous villagers was undertaken via Kuk mediation and the network of rural committees that elects Kuk members. Thus, Kuk demands were not to be taken lightly.

From the SHP’s 1959 predecessor policy to the 1972 version, the Kuk repeatedly advocated for more favorable terms, many of which the government granted. For example, the 1972 policy did not contain an earlier restriction that linked house-building to the marriage of the applicant. The Kuk also won the elimination from the final 1972 policy of language that would have limited construction to “genuine village expansion”.

Of course, abuse was apparent from the start. Official worries over villagers’ land speculation prompted the 1976 establishment of the five-year rule that limits the early transfer of small houses. Government auditors identified continuing abuses in 1987, and then again in 2002. Through it all, the Kuk broadly tolerated the continuing development of the New Territories. Despite the occasional hurdle, the arrangement held up nicely.

So when bureau heads such as Development Secretary Paul Chan Mo-po (陳茂波) claim that there is no tolerance for using inappropriate means to trade building rights, they err knowingly. On the contrary, villagers trade inappropriately precisely because there has always been unofficial tolerance.

The Kuk is Justified

In this light, the Kuk’s threat of a lawsuit in response to the November case makes sense. The bone of contention is a 2007 letter to then-Kuk-Chairman Lau Wong-fat (劉皇發), written by Carrie Lam Cheng Yuet-ngor (林鄭月娥), the government’s current number-two. In that letter, Lam, then Development Secretary, reportedly tells Lau that villagers who sell their rights would not face criminal charges.

Moreover, the body’s demands are reasonable. A 25 January open letter of a Kuk-organised concern group, calls on the government to clarify the status of the SHP under the Basic Law, formally state its policy on criminalisation, and answer whether indigenous villagers who apply for SHP land must live in the houses that are built. Effectively, this is a call for legal certainty, a plea that officials should grant regardless of how the policy has been abused.

Yet certainty, when it comes, may not be kind to the Kuk or its indigenous constituents. After all, a maturing District Council system now represents all New Territories inhabitants, few of whom hold “indigenous” status.

The Kuk has also suffered setbacks in recent decades, from a 1994 bill, which extended inheritance rights to indigenous women, to the 2000 Pat Heung Village ruling, which gave non-indigenous villagers the right to participate in rural committee elections. The Kuk’s influence over the government is dissipating, and its leaders know it.

The Once and Future Kuk

The pre-1970 Kuk was only powerful because the government perceived it as indispensable. If the present-day Kuk wants to remain relevant, it must restore some of that indispensability. This explains the Kuk’s present drive to establish a new political party.

Currently, if the Kuk wishes to make a mark on New Territories development, its one functional constituency vote in LegCo will not go far. Alternatively, the body could impact district consultations and local projects through the 27 ex-officio seats held by rural committee chairmen in the 10 New Territories District Councils. This representation is nothing to dismiss casually, but it still represents a relatively weak hand.

A new political party would give Kuk supporters a recognizable flag to rally around while channelling funds directly into a dedicated party machine. Supporters’ votes could be concentrated on Kuk candidates rather than diluted among existing pro-establishment parties and independents.

Indigenous Hongkongers are not a large minority. According to a Civic Exchange survey, those with the right to build small houses, and their households, likely represent 3 to 3.7 percent of Hong Kong’s population. Yet the think tank highlights this group’s high degree of motivation when it comes to New Territories issues.

Conceivably, with strong voter mobilization, the Kuk’s party could enjoy some electoral success at the district or LegCo levels, especially if can develop a platform that interests a wider set of constituents. In such a case, the Kuk might manage just enough representation to affect the outcome of narrow and controversial votes, making it conditionally indispensable if not permanently so. This adaptation to a democratising system may ultimately help retain a voice for the economic interests of village elites in future policymaking.

Of course, it may not save the SHP in the short run. The recent convictions may presage a change in officials’ political calculations, if not the historic utility of an arrangement that has genuinely served its intended purpose.